Wall Street's Best Hidden Stocks

When asked for the secret of his success, baseball player Wee Willie Keeler replied, "Hit 'em where they ain't." What worked for Willie at the plate applies equally well in investing. 

Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. When Wall Street turns a blind eye, you have a chance to get in before these stocks get discovered -- or rediscovered -- and start taking off. 

Below, we'll check out companies with only a handful of analyst coverage, then pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS' top ratings, but hasn't yet caught analysts' attention, could be your next home run investment. 

Stock

CAPS Rating
(out of 5)

Wall Street Picks

5-Year EPS Growth Estimate

China Marine Food Group (Nasdaq: CMFO  )

****

3

36%

Jamba (Nasdaq: JMBA  )

****

3

20%

TeleCommunication Systems (Nasdaq: TSYS  )

****

4

16%

Sources: Yahoo! Finance and CAPS.

Remember, without analyst support, you'll have to do your own scouting to see whether these stocks deserve a spot on your portfolio's roster. Don't just buy or sell them based solely on their appearance here. 

A utility player
When processed seafood company China Marine Food Group suddenly entered the drink market with an algae-based drink that it paid a high price to obtain, it wasn't surprising that red flags suddenly sprouted. Investors have been treated to an assortment of corrupt, self-dealing scandals in emerging markets that makes them gun shy about going through it again.

Mahindra Satyam (NYSE: SAY  ) , before it imploded, tried to buy up the controlling family's businesses in an attempt to conceal the accounting fraud going on there. And many feel the jury is still out on the corporate convention center that American Oriental Bioengineering (NYSE: AOB  ) bought for itself at tip-top prices.

Still, investing in China may be worth your while because it simply is the biggest growing economy in the world. There's opportunity there, and the few hucksters shouldn't discourage you.

As for China Marine, management has insisted its drink products really are on the shelves of Wal-Mart Stores in China despite allegations they're not, and at least one amateur investigator has found it to be true. CAPS member rumymudda says it's just those sort of conflicting opinions that  give investors the opening to get into a stock at a good price:

Latest allegations about fraud are most likely misunderstandings and have provided a good entry point. This companies growth potential is explosive.

All fun and games
McDonald's (NYSE: MCD  ) decision to get into the juice smoothie market may have validated Jamba's own growth story, but that's also likely caused a lot of consternation that Jamba would lose share. In addition to the burger chain, there is more competition in the space as Starbucks has also discovered juice as a magical elixir.

But franchisees apparently don't feel that way as Jamba sold 13 stores to current and previous franchise owners who are expecting the smoothie maker to grow the brand and turn around a company that was hurt by overexpansion, a nasty recession, and the aforementioned rivals moving into its space.

However, CAPS All-Star member HollywoodDan is going to need more proof of success:

Just had a Robek's go broke in a happening location here. I just can't see these jokers ever getting the volume they need to grow. America is too fat, sloppy, lazy and in need of instant gratification to ever choose consistently healthy living.

Kicking it higher
Despite a dramatic drop in profits from the year-ago period, TeleCommunication Systems also reported revenue surging higher. Revenue hit a record $92.7 million, up 38%, as commercial business grew 45% and government business jumped 59%

The overwhelming majority of CAPS members rating the mobile communications technology company think it will go on to outperform the broad market averages, with All-Stars like cecamadocv believing the market has overreacted and the stock has hit bottom.

Add your text to the TeleCommunication Systems CAPS page and let us know if it will rebound from here.

Swing for the fences
When seeking investments where no one else is looking, Motley Fool CAPS is the best place to start your own research. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. 

Sign up today for the completely free service, and tell us whether these hidden stock opportunities will help us go one up on Wall Street.

Wal-Mart is a Motley Fool Inside Value recommendation. Starbucks is a Stock Advisor selection. Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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